Minutes of Regional Council Meeting

1. Welcome/Prayer/Apologies/Notices

The Chairman welcomed everyone to the meeting and offered the prayer.

Resolution

RC15/15 That the apologies for absence from Cr Peter Beaven be received.

Pipe/Belford

CARRIED

The Chairman advised that items 17 and 18 will be considered immediately following morning tea to enable attendance by the HBRIC Ltd Chairman.

2. Conflict of Interest Declarations

There were no conflict of interest declarations.

3. Confirmation of Minutes of the Regional Council Meeting Held on 25 February 2015

Councillor Dick arrived at 9.05am

An issue with the wording of the Matters Arising record was raised. At issue was whether the summary adequately covered the opinions expressed by individual councillors.

The Chairman, referring to Standing Order 3.17.2, ruled against accepting an amendment to that section of the minutes on the basis that the summary minute meets the requirements of the Standing Order and the Local Government Act – there being no requirement to record the opinions or views expressed by individuals.

RC16/15

Resolution

Minutes of the Regional Council Meeting held on Wednesday, 25 February 2015, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and accurate record.

Scott/Pipe

For: Dick, Hewitt, Scott, Pipe, Wilson

Against: Graham, Barker, Belford

CARRIED

4. Matters Arising From Minutes of the Regional Council Meeting Held on 25 February 2015

There were no matters arising from the minutes.

Follow-up Items from Previous Regional Council Meetings

Ms Lambert provided an update on the status of the follow-ups from the 25 February council meeting, advising that the first meeting of the working party on “Incorporating Tangata Whenua Views” is planned for next week.

RC17/15

Resolution

1. That Council receives the report “Follow-up Items from Previous Regional Council Meetings”.

Scott/Dick

CARRIED

Call for any Minor Items not on the Agenda

Recommendations

That Council accepts the following minor items not on the Agenda, for discussion as Item 21:

Cr Hewitt – CHB activities

Cr Scott – Taharua fieldtrip

Cr Graham – video attendance at meetings

Affixing of Common Seal

1. The Common Seal of the Council has been affixed to the following documents and signed by the Chairman or Deputy Chairman and Chief Executive or a Group Manager.

Seal No.

Date

1.1

Leasehold Land Sales

1.1.1 Lot 191

DP 6598

CT C2/386

- Agreement for Sale and Purchase

- Transfer

1.1.2 Lot 27

DP 6391

CT E2/1441

- Transfer

1.1.3 Lot 41

DP 4488

CT 55/141

- Transfer

1.1.4 Lot 83

DP 13055

CT E2/1287

- Transfer

3830

3833

3831

3832

3834

26 February 2015

18 March 2015

6 March 2015

11 March 2015

18 March 2015

1.2

Staff Warrants

1.2.1 M. Dawson

(Delegations under Resource Management Act 1991; Soil Conservation and Rivers Control Act 1941; Land Drainage Act 1908 and Civil Defence Act 1983 (s.60-64); Civil Defence Emergency Management Act 2002 (s.86-91) and Local Government Act 2002 (s.174)

3829

25 February 2015

RC18/15

Resolution

That Council:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted policy on significance and that Council can exercise its discretion under Sections 79(1)(a) and 82(3) of the Local Government Act 2002 and make decisions on this issue without conferring directly with the community and persons likely to be affected by or to have an interest in the decision due to the nature and significance of the issue to be considered and decided.

2. Confirms the action to affix the Common Seal.

Pipe/Scott

CARRIED

Adoption of the Supporting Accountability Documents and Consultation Document for the 2015-25 Long Term Plan

Mr Drury introduced the item, outlining the process undertaken in developing the LTP consultation document from the Council’s accountability documents – which include a 30 year Infrastructure Strategy, Financial Strategy, Forecast Financials and Funding Impact Statement as well as Groups of Activities levels of service and performance measures.

Mr Drury advised that the Auditors provide an Audit Report which will be included in the Consultation Document “Our Plan” and tabled documents where amendments were required by the Auditors. These included minor amendments to the Infrastructure Strategy (section 3.4 Projected Capital Works covering enhancements and increased level of service), the Significant Forecasting Assumptions (pg 11 of the Policies document), the Financial Strategy (section 1.3) and the ‘Our Place’ document itself.

Concern was raised in relation to procedural issues with the possible consequences of further amendments, and whether the documents would then be required to be re-audited. In response, Mr Drury advised that his understanding is that if amendments are made to the Consultation Document at the meeting today, other than for typos, that document would then be required to go back to the Auditors for re-approval.

Mr Drury then went through the amendments required by the Auditors, as outlined in the Council paper and included in the tabled printouts provided to councillors, and responded to questions raised in relation to rates comparisons, investments, investment returns, risk profiles in the Investment Strategy and clarity of information. He advised that amendments to documents were minor – to provide clarity or a fuller explanation – and were not material or changes to policies or figures considered and agreed by councillors through the workshop process.

Councilors reiterated concerns in relation to adopting ‘Our Plan’ without further amendment by councillors due to time restraints if the Auditors have to review even minor amendments to the document before it can go out for consultation.

RC19/15

Resolutions

That Council:

1. Confirms the decisions recommended in the LTP 2015-2025 are not able to be implemented until the effect of these decisions is included in the LTP Consultation Document and that this document be subjected to a special consultative procedure as required by section 83(1) and section 93(A) of the Act.

2. Adopts the following accountability documents supporting the 2015-2025 LTP Consultation Document:

2.1. Financial Strategy

2.2. Infrastructure Strategy

2.3. Group of Activity Information

2.4. Financial Information

2.5. Policies

2.6. Council Controlled Organisations.

3. Adopts the 2015-2025 LTP consultation document “Our Plan” and notes that “Our Plan” has been audited and the Audit report will be included as part of the published document.

4. Agrees that the special consultative process for the 2015-2025 LTP consultation document “Our Plan” provides the opportunity for the community to be consulted on:

4.1. The proposed scale and schedule of charges as set out in the “Resource Management Charges” as included in the financial information provided as part of the LTP supporting accountability documents and as part of the overall statement of proposal in accordance with section 36(2) of the Resource Management Act 1991.

4.2. Any significant decisions that are included in “Our Plan” serves as and replaces the Statement of Proposal as required under section 83(1)(a)(i)(ii).

4.3. Proposed amendments to the investment policy, liability management policy and revenue and financing policy.

5. Agrees to fund the underlying deficits in the years where the deficits are shown in the Long Term Plan, from cash operating balances which are estimated to be at a level sufficient to provide such funding.

Scott/Dick

CARRIED

Our Plan Communications Strategy

Mr Drew Broadley provided an outline of advertising, displays and ‘Have Your Say’ events to publicise ‘Our Plan’ and to encourage members of the public to comment and make submissions expressing their views.

RC20/15

Resolutions

That Council:

2. Endorses the proposed promotion and community engagement programme for the Our Plan consultation document.

Pipe/Scott

CARRIED

10.

State of Our Environment Five-Yearly Summary Report

Mr Iain Maxwell introduced the item and explained that the Summary report is a non-technical report to inform the public of environmental trends in the Region. Dr Stephen Swabey provided a presentation highlighting some of the report’s findings and explaining the source technical reports contain the specific data used to identify the state of the environment and trends.

Dr Swabey highlighted the good or improving trends (over last 5 years) including improvements in air quality on the Heretaunga Plains as measured by a decrease in the number of exceedences of the NES, lower phosphorous levels in 11% of HB rivers, E.coli levels in groundwater 100% of HBRC monitored sites compliant with NZ Drinking Water Standard in 2013, and decreasing nitrate-nitrogen levels in the Taharua catchment. Poor or declining findings highlighted included that streams are getting muddier than nationally, 8 of our 19 native fish species are threatened and areas of Ahuriri estuary have elevated levels of heavy metals.

There were questions raised in relation to air quality trends (Kathleen Kozyniak responded), heavy metals in the Ahuriri Estuary, particularly whether zinc is an issue (Iain Maxwell), groundwater quality in relation to public health and bottling water (Iain Maxwell), the threatened native fish species (Sandy Haidekker) and possible reasons for that, as well as the discovery of new bug species (Stephen Swabey) and MCI measurements driven by temperature in the Karamu-Clive (Sandy Haidekker).

It was emphasised that this valuable document should be as widely distributed as possible.

RC21/15

Resolutions

That Council:

2. Adopts the “State of Our Environment Five-Yearly Summary” report for publication.

Graham/Hewitt

CARRIED

The meeting adjourned at 10.43am and reconvened at 10.50am

18.

HBRIC Ltd March 2015 Update

Dr Andy Pearce (Chairman) and Mr Andrew Newman (CE) provided an update on the RWSS project, advising that the resource consents for the project have been granted, and the Board of Inquiry has indicated its draft decision on the referrals by the High Court will be released in late April and the final decision in mid May.

HBRIC expects that the project will be able to reach financial close within 4 months of receiving the final, uncontestable consent conditions from the Board of Inquiry, a view shared by external investors currently in discussions with HBRIC. There was further discussion about optimisation of the secondary water distribution network, the design and construction contract, water uptake by farmers and progression through the ‘sign-up’ process, as well as climate and soil data for the area.

Further discussion traversed further potential appeals to the Board of Inquiry final decision, the ‘land swap’ process with DoC currently underway and possible effects of political change on the project.

Mr Heath Caldwell provided an overview of the HBRIC Ltd financials, noting that a copy of the Parent Company balance sheets has been included as earlier requested by councillors. Discussion traversed the costs of the Board of Inquiry referral and whether some of those associated with PC6 and not the RWSS consents should lie with Council, the breakdown of operational costs, and an explanation of the geotechnical work proposed to be brought forward as preliminary work necessary for finalising the final design details of the dam and headrace and not actual construction.

RC22/15

Resolution

1. That Council receives the “HBRIC Ltd and RWSS March 2015 Update” report.

Belford/Barker

CARRIED

17.

RWSS Financing Request of the Regional Council

Dr Andy Pearce introduced HBRIC Ltd’s RWSS financing request and the rationale for that request, being that due to delays with achieving financial close for the RWSS the company will not have funds to be able to carry on past 30 June 2015 even having cut back on costs and deferring non-essential work.

The Board believes that Financial Close will be achievable within 4 months of receiving clean, un-contestable RWSS resource consent conditions.

Mr Heath Caldwell responded to queries in relation to the cost of borrowing, and Mr Paul Drury advised that his understanding is that the costs of borrowing will be capitalised as has been the case to date. There was further discussion in relation to whether or not the project does proceed and the impacts on Council’s budgets, as well as the liquidity of HBRIC Ltd.

Debate traversed the related risks associated with ongoing delays to the project, financial risks for Council, implications for HBRIC Ltd in terms of operational budgets and liquidity.

It was suggested that the project is at a critical stage and that HBRIC Ltd requires support to enable it to bring the RWSS to fruition, one way or the other, but that ultimate responsibility lies with Council and it would appear reasonable for Council to approve prudent expenditure and/or drawdown requests.

Discussion further traversed the implications of the Board of Inquiry releasing its final decision in May and possible further delays should there be further appeals, and the potential further delays that would cause, the timing of meeting the ‘conditions precedent’ and Financial Close being reached, the updated report requested of Deloitte, as well as ongoing funding required for the company to continue to meet its operational responsibilities, such as staff and contractual costs.

Risks associated with further delays, whether Council should seek independent legal advice on spending on some work prior to the conditions precedent being met, and whether Councillors could be seen to be acting as ‘deemed directors’ by requiring HBRIC directors to seek approval for expenditure prior to drawdown.

The Chairman confirmed that, at the May 2014 Council meeting, Council resolved that “a further report will be required from Deloitte when the final RWSS business case, including the capital structure, has been finalised by HBRIC Ltd”.

RC23/15

Resolutions

Councillor Dick moved a motion, seconded by Councillor Barker; being:

That Council:

2. Approves HBRIC Ltd being able to borrow up to the lesser of 2% of the value of its balance sheet equity on 30 June 2015 or the sum of $4 million, either from Council, or from banking sources, or from CIIL whichever provides the best combination of financial terms and other requirements.

3. Notes that, if the proposed borrowing is approved by Council, HBRIC Ltd will progressively seek prior approval from Council on the drawdown of debt finance and the purpose for which the funds are intended to be used.

Councillor Belford moved an amendment, seconded by Councillor Graham; being:

That Council:

1. as it stands

2. Receives the HBRIC Ltd financing proposal and tables it until the 27 May HBRC meeting.

3. Commissions a report from Deloitte, to be completed by 20 May, updating its analysis and advice pertaining to HBRC's further investment in the RWSS, including the advisability of authorising the interim borrowing proposed by HBRIC.

4. Commissions a legal opinion from HBRC counsel, to be completed by 20 May, regarding whether any legal exposure arises from authorising construction-related expenditure prior to confirmation by HBRC that all conditions precedent have been fully satisfied.

Belford/Graham

For: Graham, Barker, Belford

Against: Dick, Hewitt, Scott, Pipe, Wilson

LOST

The meeting adjourned at 12.50pm and reconvened at 1.20pm

The amendment having been LOST, Council returned to the original motion; moved by Councillor Dick and seconded by Councillor Barker, being:

That Council:

3. Notes that, if the proposed borrowing is approved by Council, HBRIC Ltd will progressively seek prior approval from Council on the extent of drawdown of debt finance and the purpose for which it will be used as part of its regular reporting to Council.

Dick/Barker

LOST

The original motion was LOST and a new motion moved by Councillor Hewitt, seconded by Councillor Wilson, being:

That Council:

2. Approves HBRIC Ltd being able to borrow up to the lesser of 1% of the value of its balance sheet equity on 30 June 2015 or the sum of $2 million for ongoing operational expenses up to financial close, either from Council, or from banking sources, or from CIIL; whichever provides the best combination of financial terms and other requirements.

3. Notes that, if the proposed borrowing is approved by Council, HBRIC Ltd will report on the extent of drawdown of debt finance and the purpose for which it has been used as part of its regular reporting to Council.

4. Notes that if expenditure on geotechnical works is required prior to financial close HBRIC Ltd will bring a formal proposal to Council for approval of such expenditure.

Hewitt/Wilson

For: Dick, Hewitt, Scott, Pipe, Wilson

Against: Graham, Barker, Belford

CARRIED

16.

Confirmation of HBRIC Ltd Board of Directors Appointments

Mrs Lambert introduced the item, seeking reappointment of directors to the HBRIC Ltd transitional Board of Directors up until the RWSS reaches financial close as it is evident that Financial Close will not be achieved by 30 June 2015, and to clarify the terms of membership on the Board. There was discussion around the risks of aligning the terms of director appointments, which would normally not coincide with each other to avoid loss of specialist knowledge occurring all at once.

RC24/15

Resolutions

That Council:

2. Approves the re-appointment, subject to each person’s agreement, of:

2.1. Danelle Raewyn Dinsdale

2.2. David John Faulkner

2.3. Andrew John Pearce (Chairman)

2.4. Samuel Amuri Robinson, and

2.5. James Allan Scotland

as directors of HBRIC Ltd until the earlier of 30 June 2016 or 60 days post-Financial Close of the Ruataniwha Water Storage Scheme.

Pipe/Barker

CARRIED

11.

Recommendations from the Environment and Services Committee

Councillor Graham introduced the item, providing an overview of the topics discussed at the meeting which included the Upper Tukituki scheme review, a proposal for joint ownership of Hawea Park and an update on the CHB wastewater discharge consents.

RC25/15

Resolutions

The Environment and Services Committee recommends that Council:

Upper Tukituki Flood and Drainage Scheme Review

2. Agrees to proceed with a review of the Upper Tukituki Scheme and the development of a new differential rating Scheme that will provide a fair and equitable rating system to fund 82.5% of the cost of maintaining and improving the Upper Tukituki Scheme.

3. Commits to a Special Consultative Procedure in accordance with the Local Government Act 2002 prior to implementing the outcome of the review.

Hawea Park

4. Endorses the approach staff have taken to date and delegates authority to the Chief Executive to enter into commitments with parties associated with the land in question (being Part Lot 1 DP 530, Part Clive River Bed, Pakowhai Maori Reserve 5A2 Block, Section 1 SO 9684, Part Section 15 Block XVI Heretaunga SD, Lot 4 DP 400033 and Part Lot 3 DP 12384) and Ngāti Hawea, to achieve joint ownership of land within the proposed Hawea Park area.

Reports Received

5. Notes that the following reports were received at the Environment and Services Committee meeting.

5.1. Update on Progress of Upgrading Awanui Stream Stopbanks

5.2. CHB Wastewater Update

5.3. March 2015 Statutory Advocacy Update.

Graham/Hewitt

CARRIED

12.

Clifton to Tangoio Coastal Hazards Strategy Joint Committee Terms of Reference and Update

Mr Mike Adye introduced the item, advising that the Committee was given delegated authority by Council to develop its own Terms of Reference however is keen for Council’s endorsement of those. There was some discussion about how the Committee will manage confidential information at ‘open public’ meetings and the subsequent making the minutes public.

RC26/15

Resolutions

That Council, receives the verbal report and:

2. Endorses the Terms of Reference for the Clifton to Tangoio Coastal Hazard Strategy Joint Committee.

Scott/Barker

CARRIED

13.

Appointment of Finance, Audit and Risk Sub-committee Members

Mrs Lambert introduced the item and referred to the Terms of Reference adopted at the 25 February Council meeting, and consideration of an independent member.

RC27/15

Resolutions

That Council:

2. Nominates Councillor Debbie Hewitt for the membership on the Finance, Audit and Risk Sub-committee.

Dick/Wilson

3. Nominates Councillor Rick Barker for the membership on the Finance, Audit and Risk Sub-committee.

Graham/Belford

4. Nominates Councillor Scott for the membership on the Finance, Audit and Risk Sub-committee.

Wilson/Graham

5. Nominates Councillor Wilson for the membership on the Finance, Audit and Risk Sub-committee.

Scott/Barker

6. Elects Councillors Debbie Hewitt, Rick Barker, Christine Scott and Fenton Wilson to the Finance, Audit and Risk Sub-committee.

There being no further nominations, Council declared the above Councillors elected.

7. Nominates Councillor Debbie Hewitt as Chair of the Finance, Audit and Risk Sub-committee.

8. There being no further nominations, Council declared Councillor Hewitt elected as Chair of the Finance, Audit and Risk Sub-committee.

Wilson/Dick

CARRIED

14.

Appointment of Representative to the HB Sports Council

The paper was taken as read. Councillor Pipe was nominated by Councillor Wilson, and that nomination seconded by Councillor Scott.

There were no further nominations.

RC28/15

Resolutions

That Council:

2. Appoints Councillor Dave Pipe as its representative to the Hawke’s Bay Sports Council.

Wilson/Barker

CARRIED

15.

Appointment of Regional On-Scene Commander

Mrs Lambert introduced the item, seeking formal appointment of Mr Iain Maxwell as Regional On-Scene Commander and reaffirmation of the appointments of Mr Ian Lilburn and Mr Don Scott. The paper was taken as read.

RC29/15

Resolutions

That Council:

2. Appoints Iain Maxwell as Regional On-Scene Commander in accordance with Section 318 of the Maritime Transport Act 1994, following the approval from the Director of Maritime New Zealand dated 6 March 2015.

3. Reaffirms Ian Lilburn and Don Scott as Regional On-Scene Commanders in accordance with Section 318 of the Maritime Transport Act 1994 and the approval from the Director of Maritime New Zealand dated 25 August 2014.

Scott/Pipe

CARRIED

19.

Monthly Work Plan Looking Forward Through April 2015

In response to a query, Mr Maxwell advised that some of the issues with Te Mata Mushrooms are related to ‘reverse sensitivity’ but that there are also issues with odours beyond the boundary that need to be addressed. In terms of reverse sensitivity provisions in the HDC district plan, Ms Codlin gave an undertaking to advise Councillors of what HBRC’s submission contained pertaining to those issues in line with the Regional Policy Statement.

RC30/15

Resolution

1. That Council receives the Monthly Work Plan Looking Forward Through April 2015 report.

Scott/Pipe

CARRIED

20.

Chairman's Monthly Report

The Chairman spoke to his tabled report, highlighting his visit to the lakes in the Putere Lakes District of Wairoa with Ngati Pahauwera, DoC and Nga Whenua Rahui and suggesting that the area may be suitable for a Regional Planning Committee retreat.

RC31/15

Resolution

That the Chairman’s monthly report for March 2015 be received.

Scott/Graham

CARRIED

21.

Minor Items not on the Agenda

Item	Topic	Councillor / Staff
1.	CHB activities Visited during the Pukeora Estate retreat for staff and enjoyed the day. Attended the Ballance Farm Environment Award field day in Taharua with Councillor Scott and others, where they were informed about techno-farming to concentrate production in steep hill country on suitable land, cutting leaching rates and avoiding erosion. Very good, sustainable land management practices being used in that catchment.	Cr Hewitt Cr Scott
2.	Exemplary model of how non-regulatory measures can be used for environmental gains. It was also interesting learning about lag effects and water quality issues.	Cr Scott/ Cr Pipe
3.	Video attendance at meetings Read about this facility being provided for a Council in Wellington and suggests that HBRC looks into options	Cr Graham

Closure:

There being no further business the Chairman declared the meeting closed at 2.10pm on Wednesday 25 March 2015.

Signed as a true and correct record.

DATE: ................................................ CHAIRMAN: ...............................................